• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

One of the most important aspects of currency is the differences between hard and soft currency. In this paper, I will analyze the differences of the two and debate the relationship between them.

Extracts from this document...


Hard and Soft Currencies Michael Jack MGT448: Global Business Strategies Instructor: Ed Miller April 15, 2006 Abstract For thousands of years people have used money to buy, barter and trade for goods and services. The Greek empire and various trading partners were the first to use coins as monetary value which strengthened the economy and improved the quality for life for their society (us.rediff.com). Today, with virtually all countries in the world having their own currency, there are many things to know in terms of how the different currencies are exchanged, traded and spent. One of the most important aspects of currency is the differences between hard and soft currency. In this paper, I will analyze the differences of the two and debate the relationship between them. Let us first start out with the text book definition of hard currency. Hard currency can be defines as currency in which investors have confidence, such as that of a politically stable country with low inflation and consistent monetary and fiscal policies, and one that if anything is tending to appreciate against other currencies on a trade-weighted basis. ...read more.


Spain and Germany tried with complete economic failures. All currency goes through different levels of inflation, what is important that hard currency will depreciate less then the currency in other countries. Through much experience, the American government has done a good job of controlling inflation using both monetary and fiscal policy. Due to America's continued stability in terms of its government, military and societal demands; the American dollar continues to be one of the strongest currencies in the world. America's sustained involvement on the world stage in terms of political and monetary issues hopefully will and has secured a strong future for the American dollar. There have been many instances where other countries have discarded their failing currency and have taken a hard currency as its national currency, usually by pegging their currency to the US Dollar, China has just recently stopped doing this. Other strong currencies of the world are the Swiss Franc, the British Pound and the Japanese Yen. American currency is considered stable and it is used world wide for business deals and ventures. ...read more.


Such poorer nations are condemned to employ other nation's currencies or soft currency of their own. Once they use soft currency, poorer nations often try to harden it by using soft currency (cheap money) to motivate higher production from year to year and high rates of savings. There are many factors such as political, social, economical and military stability that play a part in making a currency hard. A country which produces hard currency has many advantages over those countries that do not. Possessing hard currency makes it much easier to do business world wide. It can be equated to have a good credit score and shopping for a car. You will be much more likely to not just get the car, but get it for cheaper with a good credit score. Countries like Japan, Brittan, European nations and America all have taken full advantage of printing hard currency and have thus enjoyed being major economic powerhouses. The new global business environment will show overtime how shifts in power will affect these and other economies. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

    Many neoclassical economists disagree with current U.S. drug policy. One such group of economists is Jeffrey Miron, Suren Basov, Mireille Jacobson. Prof. Miron is an economics professor at Boston University. He attained his bachelor's degree at Swarthmore in 1979 and a doctorate at MIT in 1984.

  2. Chinese economy sets for soft landing in 2005.

    President of the United States, hailed China's economic and social progress over the past 25 years, noting that adult illiteracy has been halved, while China's rapid growth has been the single biggest factor in reducing global poverty. To sustain growth over the long term, she reckoned, China should shift to

  1. This report will analyze three main target markets (EU, Japan, Korea) for our company ...

    Market E.U. is the biggest country union in this world, it include 25 countries. The developing of the EU can not be ignored. In the 2002, the import of the EU from America is 176 billion Euros Beginning. This is a really strong number for American export.

  2. The Quest for Optimal Asset Allocation Strategies in Integrating Europe.

    In Brooks & Del Negro (2002c), they criticise the methodology of Heston & Rouwenhorst (1994) which is described above and followed by most papers. The dummy approach followed by the HR methodology assumes that all companies are a member of exactly one country and one industry.

  1. Investigate if the UK would benefit by adopting the single currency, and if so ...

    France and Germany in particular want to integrate the core European economies more closely and move towards a single European Economy. A single currency will eventually produce a European GDP, which is higher than that of the USA or Japan and thus will be extremely powerful in economic terms.

  2. This report will establish the opportunities and threats presented to Sony by the EU ...

    Entertainment Group divisions which have consolidated in them having recognition world wide. Sony sells series of electronic goods which started in them producing magnetic tape and tape recorder in 1950, the commercially successful radio in 1955, the world's first all-transistor TV set in 1960, the worlds first colour video cassette recorder in 1971 and the walkman in 1979.

  1. Liberalization: where it has lead us and where it is headed

    That's all that's necessary. Nothing more. Just get out of the way. If it did, India would bloom economically in ways that we cannot even imagine today. Many people believe that government should do more than get out of the way.

  2. The Euro Debate

    This market will work more efficiently and deliver its benefits more fully with the removal of high transaction costs brought about by currency conversions and the uncertainties linked to exchange rate instability. The rules, institutions and objectives of EMU are set down in the Maastricht Treaty.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work